Mortgage servicers completed one-third of the Home Affordable Modification Program permanent workouts in the first quarter compared to one year ago, but estimates for the expanded guidelines will come this summer, according to the Treasury Department.
In the first quarter of 2012, servicers completed 60,195 permanent HAMP modifications, meaning the borrower made all three trial payments on time and submitted full documentation. The total is down from 90,536 in the same quarter of last year and has been on the decline over the past six months.
The Treasury estimates 806,000 borrowers are eligible for the program under current guidelines, and the servicers have already established contact with most.
Freddie Mac reported a decline in modifications during the first quarter as well as its inventory of seriously delinquent loans contracted and a new program outside of HAMP began.
The five largest servicers Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and Ally Financial each contacted at least 87% of its HAMP-eligible borrowers as of March 31, according to Treasury data released Friday.
All five either offered a trial plan or denied one for at least 68% of the potentially eligible borrowers, led by Ally which made decisions on 83% of its HAMP portfolio.
Servicers burned through trials aged longer than six months. At the end of March, the Treasury reported just 13,177 aged trials, down from more than 26,000 one year ago. More than one year after the program launched, servicers reported a peak in May 2010 of more than 190,000 aged trials.
The Treasury expanded the program in January by lowering debt-to-income level requirements and allowing some real estate investors into the program as well. The new guidelines were released this week to servicers, but they are not mandatory until June.
“As the expanded program criteria becomes available this summer, we expect additional borrowers to become eligible for the program,” a Treasury spokesperson said.
Since HAMP launched in March 2009, servicers completed more than 993,000 permanent modifications, which will fall short of the 3 million to 4 million originally estimated even after the new guidelines are adopted.
Of the $29.9 billion in Troubled Asset Relief Program funds set aside for HAMP, roughly $2.7 billion had been spent as of March 31, according to the Special Inspector General for TARP.
The Treasury spent much of 2011 witholding payouts to the largest servicers for underperformance, but the money was eventually returned this year when enough improvements were made.